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Harveys falls into administration with loss of 240 jobs

The Harveys furniture chain has gone into administration with the immediate loss of 240 jobs and putting more than 1,300 others at risk.

Administrators from PwC are seeking a buyer for the retailer including about 20 stores and its three manufacturing sites.

Major job cuts announced so far

The coronavirus lockdown has prompted some of the UK’s most prominent companies to announce large-scale job losses. The aviation, automotive and retail sectors have been among the worst hit, as businesses adjust to dramatically reduced revenue projections.

While the government’s job retention scheme has so far protected millions of jobs, fears are mounting that unemployment will rise as the scheme begins to be phased out from August.

Since lockdown began on 23 March, some of the UK’s largest companies have announced plans to cut a total of 60,000 jobs globally, many of which will fall in the UK.

Rolls-Royce – 9,000 jobs
The jet-engine manufacturer has confirmed that 3,000 job cuts, of a planned 9,000 worldwide, will be made in the UK. In May Rolls-Royce said it would make the first round of redundancies through a voluntary programme, with about 1,500 posts being lost at its headquarters in Derby, as well as 700 redundancies in Inchinnan, near Glasgow, another 200 at its Barnoldswick site in Lancashire, and 175 in Solihull, Warwickshire.

BP- 10,000 jobs
The oil company said in June it plans to make 10,000 people redundant worldwide, including an estimated 2,000 in the UK, by the end of the year. The BP chief executive, Bernard Looney, said that the majority of people affected would be those in office-based jobs, including at the most senior levels. BP said it would reduce the number of group leaders by a third, and protect the “frontline” of the company, in its operations.

Centrica- 5,000 jobs
The owner of British Gas announced in June that it intends to cut 5,000 jobs, mostly senior roles, and remove three layers of management, in a bid to simplify the structure of its business. The energy firm has a total workforce of 27,000, of whom 20,000 are in the UK.

Bentley- 1,000 jobs
The luxury carmaker intends to shrink its workforce by almost a quarter, slashing 1,000 roles through a voluntary redundancy scheme. The majority of Bentley’s 4,200 workers are based in Crewe in Cheshire.

Aston Martin Lagonda – 500 jobs
The Warwickshire-based luxury car manufacturer has announced 500 redundancies.

British Airways – 12,000 jobs
The UK flag carrier is holding consultations to make up to 12,000 of its staff redundant, a reduction of one in four jobs at the airline. BA intends to cut roles among its cabin crew, pilots and ground staff, while significantly reducing its operations at Gatwick airport.

Virgin Atlantic – 3,000-plus jobs
Richard Branson’s airline is to cut more than 3,000 jobs, more than a third of its workforce, and will shut its operations at Gatwick.

EasyJet – 4,500 jobs
The airline has announced plans to cut 4,500 employees, or 30% of its workforce.

Ryanair – 3,000 jobs
The Irish airline intends to slash 3,000 roles and reduce staff pay by up to a fifth.

Aer Lingus – 900 jobs
The Irish airline, part of International Airlines Group (IAG) plans to cut 900 jobs.

P&O Ferries – 1,100 jobs
The shipping firm intends to cut more than a quarter of its workforce, a loss of 1,100 jobs. The company, which operates passenger ferries between Dover and Calais, and across the Irish Sea, as well as Hull to Rotterdam and Zeebrugge, will initially offer employees voluntary redundancy.

JCB – 950 jobs
Digger maker JCB said in May up to 950 jobs are at risk after demand for its machines halved due to the coronavirus shutdown.

Ovo Energy – 2,600 jobs
Britain’s second biggest energy supplier announced in May it planned to cut 2,600 jobs and close offices after the lockdown saw more of its customer service move online.

Johnson Matthey – 2,500 jobs
The chemicals company said in June it is planning to make 2,500 redundancies worldwide over the next three years. The move will affect 17% of the workforce at the firm, which is a major supplier of material for catalytic converters.

Bombardier – 600 jobs
The Canadian plane maker will cut 600 jobs in Northern Ireland, as part of 2,500 redundancies announced in June.

The Restaurant Group – 1,500 jobs
The owner of Tex-Mex dining chain Chiquito, and other brands including Wagamama and Frankie & Benny’s, said in March that most branches of Chiquito and all 11 of its Food & Fuel pubs would not reopen after the lockdown, leading to the loss of 1,500 jobs.

Monsoon Accessorize – 345 jobs
The fashion brands were bought out of administration by their founder, Peter Simon, in June, in a deal which saw 35 stores close permanently and led to the loss of 545 jobs.

Clarks – 900 jobs
Clarks plans to cut 900 office jobs worldwide as part of a wider turnaround strategy

Oasis and Warehouse – 1,800 jobs
The fashion brands were bought out of administration by restructuring firm Hilco in April, in a deal which led to the permanently closure of all of their stores and the loss of more than 1,800 jobs.

Debenhams – 4,000 jobs
At least 4,000 jobs will be lost at Debenhams as a result of restructuring, following its collapse into administration in April, for the second time in a year.

Mulberry – 470 jobs
The luxury fashion and accessories brand said in June it is to cut 25% of its global workforce and has started a consultation with the 470 staff at risk.

Jaguar Land Rover – 1,100 jobs
The car firm is to cut 1,100 contract workers at manufacturing plants the UK, potentially affecting factories at Halewood on Merseyside and Solihull and Castle Bromwich in the West Midlands.

Travis Perkins – 2,500 jobs
The builders’ merchant is cutting 2,500 jobs in the UK, accounting for almost a 10th of its 30,000-strong workforce. The company, which is behind DIY retailer Wickes and Toolstation, said the job losses will affect staff in areas including distribution, administrative roles and sales. The move will also affect staff across 165 stores that are now earmarked for closure.

All its stores will continue to trade for now, but industry watchers believe a buyer is unlikely to be found. The retailer has been struggling for years and is also heavily reliant on sister chain Bensons for Beds with which it shares several sites.

Bensons was also put into administration on Tuesday, but has been bought out in a pre-arranged deal by its private equity owner Alteri Investors, with the aim of saving between 150 and 175 of the chain’s 242 stores, its Huntingdon manufacturing operation and nearly 1,900 jobs.

The buyout involves new investment of £25m into Bensons by Alteri. All current Harveys and Bensons’ orders will be honoured by the ongoing business.

Callout

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Zelf Hussain, joint administrator at PwC, said: “The group had been facing increasingly challenging trading conditions in recent months, in particular the Harveys furniture business. This has resulted in cashflow pressures, exacerbated by the effects of coronavirus on the supply chain and customer sales. It has not been possible to secure further investment to continue to trade the group in its current form.”

Harveys and Bensons’ parent group appointed administrators from PwC on Tuesday morning after a tough period of trading for furniture retailers who were suffering from a slowdown in the housing market and low consumer confidence even before the government-imposed high street shutdown forced them to temporarily close stores in March.

“The restructuring, whilst obviously difficult for Harveys’ employees, will safeguard more than half the group’s workforce and is a necessary milestone on Bensons’ journey to becoming a market-leading beds retailer with a strong omnichannel presence,” said Gavin George, the chief executive of Alteri.

“We will continue to work closely with the management team on the turnaround of the business which we believe can have a bright future, despite the challenges facing the retail industry, including the long-term impact of the coronavirus pandemic.”

Alteri bought Harveys, which was founded in 1966, and Bensons, which has been in business for 70 years, in November last year.

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Business

The window to prevent mass unemployment is rapidly closing

Today is the day that many businesses on our high streets have dreaded – the due date for the next quarterly rent. This is felt most acutely by those businesses that make up the backbone and character of many local communities but remain closed, such as pubs, hairdressers and restaurants.

Even much-loved businesses whose customers are eagerly anticipating their return cannot escape economic reality. Without money coming in, they fear debt could rapidly become unsustainable. It is critical they are given confidence this will not be the case, otherwise much greater unemployment will ensue. It makes no sense that, from July, the chancellor has decided that these businesses must pay increased contributions to furloughed staff, with no alternative support in place. This will simply lead to more people losing their jobs – and much of the good work done by furlough will have been undone.

Callout

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A different approach is needed. That is why Labour is calling for a back-to-work budget in early July, one which focuses on jobs above all else.

First, the government needs to acknowledge the risk of additional unemployment, and act to prevent the situation worsening. We already know that people who go through spells of unemployment when young can earn between 13-21% less, 20 years later. The cost of widespread unemployment to the public purse is considerable. Mass unemployment is like an invasive perennial – once it has taken hold, it can take years to fix. Better to prevent it ever taking root.

The government’s one-size-fits-all approach to support schemes makes no sense – it treats industries that can open today and industries that can’t exactly the same. The chancellor refuses to publish any modelling on the impact of this approach on unemployment. Yet failing to change course will inevitably lead to more people out of work.

A self-employed hairdresser, for example, or worker in hospitality, will be very unlikely to see the business they work in return to full capacity in the near or even medium term. We have repeatedly urged the chancellor to adopt a sectoral approach to economic support. This should include introducing the employer contribution at a slower rate for those sectors that have been hardest hit – not least because the promised sector deals are still yet to materialise.

We have also seen next to no action to encourage young people to stay in education and training, even though the evidence shows this is an effective way to keep them out of the pool of unemployed people.

Secondly, given the already disturbing level of unemployment, the government must act now to put in place the support needed for people to be able to get back into work. We need tailored support for groups with specific challenges such as young people, older people and disabled workers – and an early-warning system for major employers planning redundancies.

The government should also be using the localised data and knowledge it has from the furlough and self-employed schemes so that the response isn’t just dreamt up in an office in Westminster, but works right across the UK. Labour-run local authorities and metro mayors are already working on plans to provide this kind of support, especially for young people. So far, the government has lagged far behind.

Finally, the government needs to provide confidence and support to employers to create new jobs. A well-designed apprenticeship guarantee policy, while welcome, would not be enough – it would miss out almost half a million young people, who would not currently be in line to participate.

Instead, we need a detailed stimulus, focused on measures leading to sustainable employment, and targeted schemes like the Future Jobs Fund put in place by the last Labour government, to support the unemployed back into work. Moving back the stimulus means that even if individuals get the help they need, not enough will have been done to stimulate demand and create new jobs.

The UK lags behind other nations here, with the German package focused on promoting the environmentally friendly, work-rich industries of the future. Just announcing a handful of prestige projects, especially if they are not tied to the promotion of employment and skills, would be a lost opportunity.

The UK government was too slow to get PPE to hospitals and care homes and too slow to put in place its test, track and trace system – which was once billed as “world-beating” but currently looks barely fit for purpose.

We cannot afford for the government to be asleep at the wheel when red lights are flashing on the economy’s dashboard. Labour supported the creation of the furlough and self-employed support schemes – indeed, we called for them. Nobody thinks they should last longer than necessary. But a poorly designed winding down would be a disaster for business and a disaster for jobs. The government can no longer ignore the warning signs. It must act to save jobs.

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